Minnesota ranks 10th in unemployment with an adjusted unemployment rate of 7 percent.* I like to think of it as being in the top ten states with the lowest unemployment rate. The lowest unemployment rate is in North Dakota, 3.7 percent, and the highest is Nevada where the unemployment rate is more than twice as high as ours at 14.4 percent. The national average is 9.6 percent. Minnesota unemployment rates have been below the national average for decades.
The clients I work with often ask me when I think home values will start going up. Honestly, I don’t see any reason why they would go up any time soon. The housing market will improve, and home values will increase, when the unemployment rate goes down. It is really pretty simple: people who don’t have jobs can’t buy houses, and people who think they may lose their jobs do not buy houses.
We have lost about a decade of appreciation in some areas but I am seeing variances by neighborhood. The neighborhoods with the highest foreclosure rates have seen the biggest decline in property values across the board — not just for the foreclosures.
Some home owners who want to sell are trying to decide if they should sell now or in the spring. I don’t have an answer. For some sellers who would also like to buy they may come out ahead selling now while the interest rates and home prices are low. In general, home-buying activity is low right now, which means it takes longer to sell and it is a buyers’ market. Will there be more buyers in the spring? Will the interest rates be as low as they are now? Will the unemployment rate be higher or lower or about the same?
When I get answers to my three questions I will be able to tell people if they should sell now or wait until the spring.
* Numbers are from the US Bureau of Labor Statistics.